07 July 2021| Bihar Home Developers and Builders v. Narendra Prasad Gupta | Request Case No. 28 of 2020 | Sanjay Karol CJ | 2021 SCC OnLine Pat 1355

A single judge of the Patna High Court has ruled that the Real Estate (Regulation and Development) Act, 2016 is not inconsistent with the ACA. Sanjay Karol CJ relied on Section 88, RERA, which provides that the provisions of RERA shall be in addition to, and not in derogation of, the provisions of any other law. He also found no inconsistency between the two enactments within the meaning of Section 89 RERA (that gives RERA the primacy over another statute in case of an inconsistency).

Karol J also said that the petitioner’s right to invoke arbitration was not foreclosed or waived an argument that the underlying agreement and the arbitration agreement were fraudulently obtained (because the respondent was not allowed to read the document before it was signed and registered with RERA) was also rejected. After it received the notice of arbitrator, the respondent filed a suit to declare the agreements null and void. It had also initiated criminal proceedings alleging fraud, in which the Magistrate ruled (presumably when declining to take cognizance) that forgery was not made out. Neither the civil action nor the respondent’s petition in the High Court against the Magistrate’s order was considered a bar to the appointment of an arbitrator.

The dispute had arisen in the context of a development agreement registered with RERA. The petitioner launched the project but later invoked the arbitration clause alleging that the respondent concealed correct ownership information and disputes inter se co-owners.

Read the judgment here.